LARNACA, Cyprus – Prosafe SE has announced the terms of a proposed comprehensive refinancing that, if completed, the company says will provide it with greater financial flexibility until the end of 2020, including a “solid liquidity buffer to weather a prolonged market downturn.”
Prosafe also agreed with an operator to defer the delivery of one vessel while amending and extending contracts with another.
The semisubmersible accommodations operator first said in April that it had initiated a review of its strategic options and funding situation. Its most recent update was given in June, when Prosafe said that it was engaging in constructive dialogue with key stakeholders and anticipated a solution during the summer.
The combined effect of the refinancing is expected to improve the company’s liquidity by about $478 million over a five-year period and reduce the net interest bearing debt by around $395 million through 100% conversion of senior unsecured bonds, in addition to the contribution of new equity.
As part of and subject to the refinancing, Prosafe negotiated and agreed with Cosco to defer delivery of Safe Eurus to 4Q 2019 and a limitation on any further liability in the event the company does not take delivery of the vessel. In addition, the two agreed a deferral of the repayment of the $29 million seller’s credit to 4Q 2019.
Separately, Prosafe said it signed contract amendments and an extension with Petrobras Netherlands BV that will see the Brazilian operator swapping semisubmersible accommodation vessel Safe Eurus with Safe Notos.
Prosafe will also begin its contract with at an earlier date within 4Q 2016 versus the original time period of 1Q 2017. The original contract is now extended from the original duration of three years by an additional 222 days. The total value of the extended Safe Notos contract is now approximately $189 million.
As part of the same agreement, Prosafe has agreed to a day rate reduction of around 14% for the Safe Concordia from 2Q 2016 and provide Petrobras an early termination option on Safe Concordia contract on commencement of Safe Notos operations.
Safe Notos was delivered in February 2016 and is a DP-3, harsh environment semisubmersible safety and maintenance support vessel. It has been undergoing final preparatory works offshore Singapore to ensure full compliance with Petrobras requirements and in July will commence the transit to Brazil where the final approval processes will be conducted for commencement of operations within 4Q 2016.
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